Transcript Updates on the Revised Implementing Rules and Regulations

Updates on the Revised
Implementing Rules and
Regulations of R.A. 9184
Association of Government
Accountants
of the Philippines (AGAP)
The Legend Palawan
Puerto Princesa, Palawan
21 October 2011
1
What is Procurement?
2
What is Procurement?

Procurement refers to the acquisition of
goods, consulting services, and the
contracting for infrastructure projects by
procuring entity. (Sec. 5(aa), IRR, R.A. 9184)

Procurement means the acquisition by any
means of goods, construction or services.
(UNCITRAL Model Law on Procurement)
3
What is Procurement?

Acquisition means the acquiring by contract
with appropriated funds of supplies or
services (including construction) by and for
the use of the Federal Government through
purchase or lease, whether the supplies or
services are already in existence or must be
created, developed, demonstrated, and
evaluated. (FAR, US)
4
What is Procurement?

Procurement encompasses the whole process
of acquiring property or services. It begins when
an agency has identified a need and decided on
its procurement requirement. Procurement
continues through the processes of risk
assessment, seeking and evaluating alternative
solutions, contract award, delivery of and
payment for the property or services and, where
relevant, the ongoing management of a contract
and consideration of options related to the
contract. (CPG, 2008)
5
What is Procurement?

Procurement we define as the whole of lifecycle process of acquisition of goods,
services and works from third parties –
beginning when a requirement is first defined
and ending with the ultimate disposal of an
asset or end of a service contract. (P.
Gershon, OGC, UK)
6
What is Procurement?

Value for Money – is the optimum
combination of whole of life costs and quality
to meet the customer’s requirements… (P.
G.)

It must be government’s policy that all public
procurement, should be based on value for
money, having due regard to propriety and
regularity. (P.G.)
7
What is Procurement?

LCC – Life Cycle Costing

“Cost” should consider all costs throughout
the life-cycle – acquisition cost, utility costs
(energy/water consumption, maintenance),
and disposal costs.

“C to G” vis-à-vis “C to C”
8
What is Procurement?

5 Rights in Public Procurement:





Right Source
Right Quality – Satisfaction of End-User?
 Quality may refer to the overall relationship and
integration of effects of performance, lifespan,
integrity, durability, and conformity of the goods
with the technical requirements of the project.
Right Quantity – (J.I.T / Lean Procurement)
Right Price
Right Time/Delivery
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Updates on the IRR
10
IRR Revisions

Background

Harmonization


Alignment with International Best Practices
Address the Needs of PEs

Concerns raised by procuring entities, bidders and
observers
11
IRR Revisions

Scope and Application (Sec. 4)

All domestically-funded procurement activities

All foreign-funded procurement activities, unless
otherwise stated in the treaty, international or
executive agreement

But procurement funded thru foreign grants are
excluded
12
IRR Revisions

Scope and Application (Sec. 4)

GOP negotiating panels shall:



Default position - use of the IRR or selection thru
competitive bidding
Explain in writing if treaty, international or executive
agreement states otherwise
Revised IRR defines treaty, international or
executive agreements, foreign loans & grants
13
IRR Revisions

Procurement Planning (Sec. 7)

No procurement shall be undertaken unless it is in
accordance with the approved APP

End-user units shall prepare their PPMP which shall be
submitted to the budget office

Budget office shall evaluate and include in budget proposal
for approval of HOPE

Upon approval by HOPE, budget office shall furnish a copy
of budget proposal and PPMP to BAC Secretariat
14
IRR Revisions

Procurement Planning (Sec. 7)

BAC Secretariat shall review and consolidate into the
proposed APP

Upon approval of GAA/corporate budget/ordinance, enduser shall revise/adjust PPMP and submit to BAC
Secretariat

BAC shall finalize modes of procurement under the
proposed APP

APP shall be approved by HOPE or 2nd ranking official
designated by HOPE
15
IRR Revisions

Bids and Awards Committee (Sec. 11)

Alternate BAC member allowed:




Same qualification and term as principal
Attend meetings and receive honoraria
Accountability limited to their acts and decisions
Honoraria for BAC Secretariat subject to DBM
Rules
16
IRR Revisions

Observers (Sec. 13)

Allows observers from cooperatives

Requires 3 days’ prior written notice for invitation of
observers

Requires observers to inhibit in case of actual or potential
conflict of interest

Access to documents upon signing of a confidentiality
agreement
17
IRR Revisions

Advertising of Invitation to Bid (Sec. 21)

IAEB to Invitation to Bid (goods and infra) or
Request for Expression of Interest (consulting)

Includes posting in the website prescribed by the
foreign government/foreign or international
financing institution, for foreign-funded
procurement
18
IRR Revisions

Pre-Bid Conference (Sec. 22)

May be extended at least 30 cd before bid
submission



Method, nature and complexity of contract
Encourage international participation
At the option of procuring entity, only
bidders who purchased bid documents are
allowed to attend or ask questions
19
IRR Revisions

Eligibility Requirements (Secs. 23 & 24)

Reduced to 5-6 documents

Others to be submitted during –
 Post-qualification
 Prior to Award of Contract
20
IRR Revisions

Submission and Receipt of Bids (Sec. 25)

Two-Envelope System (Eligibility requirements included
in the Technical Proposal)

Documentary requirements trimmed down

Project related documents lumped into one document

In Infrastructure Projects, Technical (incl. eligibility
requirements) and Financial Proposals will now be
submitted at the same time
21
IRR Highlights

Bid & Performance Securities (Secs. 27 & 39)

Deleted certified check from acceptable forms

In general, bank issued securities must be issued
by a universal/commercial bank


However, in biddings conducted by LGUs, securities
may be issued by banks certified by BSP as
authorized to issue said instruments
Surety Bonds must be accompanied by certification from
Insurance Commission that issuer is authorized to issue
such security
22
IRR Revisions
Form of Bid and
Performance Security
a) Cash, cashier’s/manager’s
check (issued by
Universal/Commercial
Bank
Amt of Bid Security
(% = ABC)
Amt of Performance
Security
(% = Contract Price)
2%
5% (Goods & Consulting)
10% (Infra)
5%
30%
Proportionate to share
of form with respect to
the total amount of
security
Proportionate to share of
form with respect to the
total amount of security
b)Bank guarantee/draft or
irrevocable LC
c) Surety bond callable upon
demand
d) Combination of the
foregoing
23
IRR Revisions

Bid & Performance Securities (Secs. 27 & 39)


Bidder has option to choose among acceptable
forms of security
Procuring entity may not limit options available to
bidders
24
IRR Revisions

No Contact Rule (Sec. 32)

BAC, thru Secretariat, may request for clarification
of bid as long as it is in writing

Bidder’s response to the BAC’s inquiry must also
be in writing
25
IRR Revisions

Post-qualification (Sec. 34)

3 cd from notice of LCB, submit the ff:





Tax clearance
Latest income and business tax returns
Certificate of PhilGEPS registration
Other appropriate licenses and permits required by
law and stated in the Bidding Documents.
Failure to submit on time / dubious veracity =
forfeiture of Bid Security / disqualification for
award
26
IRR Revisions

Notice of Award (Sec. 37)

Conditioned on the following:




If joint venture, submission of JVA
Posting of Performance Security
Signing of Contract
If required, approvals by higher authority
27
IRR Revisions

Disclosure of Relations (Sec. 47)

Relatives within the 3rd civil degree of the
following shall be disqualified:




Head of the procuring entity
Members of the BAC, Secretariat and TWG
Head of the end-user unit or project management
office
Project consultants
28
IRR Revisions

Alternative Methods of Procurement (Secs.
48 to 53)

Alignment with international best practices


Recognized additional instances of Negotiated
Procurement (e.g., procurement from UN Agencies,
Community Participation)
Increase in shopping/small value procurement
thresholds
29
IRR Revisions

Alternative Methods of Procurement (Secs.
48 to 53)

Address concerns raised by stakeholders





Clearer rules on negotiated procurement due to 2-failed
bidding – submission of BAFO
Increase in thresholds
Lease of venue
Distinguishes Agency-to- Agency Agreements from
Procurement Agents
Shopping clarified – Only 52.1(b) needs 3
quotations.
30
IRR Revisions

Effectivity

2 September 2009


30 days from publication in the Official Gazette (3
August 2009)
Transitory

When was Invitation to Bid/Request for
Expression of Interest published?
31
GPPB Issuances

GPPB Resolution No. 08-2009 (Implementing
Guidelines for Lease of Privately-owned Real Estate and
Venue)

GPPB Resolution No. 09-2009 (Guidelines for
Shopping and Small-Value Procurement)
32
GPPB Issuances

GPPB Resolution No. 05-2010 (Approving the
Guidelines on the Procurement of Printing
Services)

GPPB Resolution No. 06-2010 (Approving and
Adopting the 4th Edition of the Philippine Bidding
Documents for Goods and Infrastructure Projects (As
Harmonized with Development Partners) and Consulting
Services)
33
GPPB Issuances

GPPB Resolution No. 04-2011 (Approving
Amendments to the Guidelines on the
Procurement of Printing Services)

GPPB Resolution No. 05-2011 (Approving the
Pre-selection Procedure in the conduct of Limited
Source Bidding under Section 49 of Republic Act 9184
and its Revised Implementing Rules and Regulations)
34
Non-Policy Matter
Opinions
35
Repeat Order

NPM No. 03-2010

What stage in the procurement process can repeat
order be considered to be within the reglamentary
period of 6 mos. as provided under Section 51 (c) of
the of the revised IRR) of RA 9184?
Repeat Order

NPM No. 03-2010

The reckoning period for computing the 6 mo. period is
the effectivity date of the contract as stated in the
Notice to Proceed (NTP) – Sec. 51, IRR of R.A. 9184.

The contract effectivity date, as provided in the NTP,
shall not be later than 7 cd from its issuance (Sec.
37.4.1 of the IRR)
Agency-to-Agency Agreements

NPM No. 04-2010

Can a GOCC having its own charter, directly engage its
wholly-owned subsidiary created under the Corporation
Code under Section 53.5 [Negotiated Procurement
(Agency-to-Agency Agreement)] of the revised IRR) of
RA 9184?
Agency-to-Agency Agreements

NPM No. 04-2010

As a general rule, GOCCs formed under the
Corporation Code cannot enter into Agency-to-Agency
Agreements

Except when a parent-subsidiary relationship exists
between the 2 GOCCs. As long as the parent GOCC
owns directly or indirectly more than half of the voting
power of its subsidiary, then it may directly engage the
services of said subsidiary.
Post-qualification Requirement

NPM No. 06-2010

Whether all the requirements under Section 34.2 of the
IRR would have to be submitted by all the parties to a
joint venture, for purposes of post-qualification, viz:
1. Tax clearance;
2. Latest income and business tax returns;
3. PhilGEPS registration certificate; and
4. Other appropriate licenses and permits required
by law and stated in the bidding documents.
Post-qualification Requirement

NPM No. 06-2010

The principle that all the parties to a joint venture were
required to submit all legal requirements provided
under the previous IRR-A is still applicable under the
revised IRR.

All the parties to a joint venture must still submit all the
legal documents, regardless of the time/stage when
these documents are required to be submitted.
Post-qualification Requirement

NPM No. 06-2010

The documents enumerated under Section 34.2 of the
revised IRR would have to be complied with not only by
one but by all the parties to a joint venture for purposes
of passing the post-qualification.
Surety Bonds as Bid and
Performance Securities

NPM No. 13 & 24-2010

What is the correct form of certification that should
accompany the surety bond which is submitted as a bid
or performance security?
Surety Bonds as Bid and
Performance Securities

NPM No. 13 & 24-2010

The certification which must be submitted must :
i.
Unequivocally state that the surety /insurance
company is specifically authorized to issue surety
bonds callable on demand, and
ii.
Issued by the Insurance Commission
Bidding Documents

NPM No. 14-2010

Whether a procuring entity may set a deadline for the
availability of bid documents at a date earlier than the
deadline for the submission and receipt of bids?
Bidding Documents

NPM No. 14-2010

No. Sec. 17.3 of the revised IRR of RA 9184 mandates
the BAC to make available the bid docs from the time
the invitation to bid is first advertised/posted until the
deadline for the submission and receipt of bids.
Bidding Documents

NPM No. 14-2010

Whether a procuring entity may be allowed to partially
upload bidding documents in its website and the
PhilGEPS considering the large sizes of the files and
the high degree of security and discretion which BSP
infrastructure projects require?
Bidding Documents

NPM No. 14-2010

No. Pursuant to Sec. 17.5 of the IRR, it is mandatory
for procuring entities to post all its bidding documents
on both its website and the PhilGEPS.
Survey of Supreme
Court Decisions
on Public Procurement
49
Section 4, R.A. 9184

Abaya vs. Ebdane
14 February 2007

DBM-PS vs. Kolonwel Trading
8 June 2007

Loan Agreement, through Exchange of Notes,
executed by the President with an IFI is an
“Executive Agreement” and must be observed
pursuant to “pacta sunt servanda.”
Protest
•
Phil. Pharmawealth, Inc. v. Phil. Children’s
Medical Center BAC, et. al.
26 June 2006
• The doctrine of exhaustion of administrative
remedies calls for resort first to the appropriate
administrative authorities to accord them the prior
opportunity to decide controversies within their
competence before the same may be elevated to
the courts of justice for review.
• Protest Mechanism under R.A. 9184 and its IRR
must be observed.
51
Protest

DBM-PS vs. Kolonwel Trading

8 June 2007

Three elements of a Protest:




In writing, in the form of a verified position paper
Submitted to the head of the procuring entity
Payment of a non-refundable protest fee
Protest mechanism applies to foreign-funded
projects
Protest

First United Constructors Corp. vs. Poro
Point Management Corp.

19 June 2009

Petitioner violated doctrine of judicial hierarchy in
directly filing its petition for Certiorari before the
Supreme Court

One must first invoke special and important reasons
Technical Specifications

COA vs. Link Worth Int., Inc.

13 March 2009

Procuring entity must verify, inspect and test
whether the technical specifications comply with
its requirements

It does not give occasion for procuring entity to
arbitrarily exercise its discretion and brush aside
the very requirements it specified
Honoraria

Sison vs. Tablang

5 June 2009

Section 15 of R.A. 9184 authorizing grant of honoraria is
not self-executing. It still needs an implementing guideline.

Honorarium is something given not as a matter of
obligation but in appreciation for services rendered.
Section 15 uses the word “may”.
Splitting of Contracts

Balderbin v. Sandiganbayan
22 March 2007
- Supreme Court cited COA Circular No. 76-41
in defining and identifying forms of splitting of
contracts.
56
Discretion to Accept or Reject
A Bid

Albay Accredited Constructors
Association v. Ombudsman
30 January 2006

The discretion to accept or reject a bid and award
contracts is vested in the government agencies
entrusted with that function. The discretion given
to authorities to accept or reject a bid is of such
wide latitude that courts will not interfere, unless
it is apparent that it is exercised arbitrarily, or,
used as a shield to a fraudulent award.
57
COA’s Presence in Public
Bidding

Villanueva v. COA
18 March 2005

Upon the agency that called for the bidding, therefore,
rests the burden of ensuring that the process
undertaken is above-board and that the outcome
thereof is most advantageous to the government. The
presence of the COA representative, as witness or
observer, on the other hand, is fundamental only to
the extent of guaranteeing documentary integrity and
transparency in the bidding process.
58
Perfection of Contract

Insular life Assurance Co., Ltd. v. Asset
Builders Corp.
5 February 2004

The effect of giving the Notice of Award … would
have been the perfection of the contract. No such
acceptance was communicated to respondent;
therefore, no consent was given. Without that
express manifestation, as required by the terms of
its proposal, there was no contract.
59
Thank you




Comments, questions?
Telephone/Fax: (+632) 900-6741 to 44
Website: http://www.gppb.gov.ph
Email: [email protected]
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